Into thicker air

The next time you glance out an airport window to watch a plane being loaded, take note of what's being stowed aboard the aircraft. Along with the rollerbags, duffels and suitcases, you may well see workers loading something else into the belly of the plane: cartons or containers of freight.

Freight has long been a staple of the passenger airlines. According to the federal Bureau of Transportation Statistics, U.S. airlines will haul some 22.6 million pounds of cargo this year. But unlike checked baggage and carry-on items, all of which undergo screening for explosive devices, much of that freight is loaded without ever being inspected.

That's become a major worry for some regulators and officials since the terrorist attacks of Sept. 11, 2001. So much so that when Congress passed the Aviation and Transportation Security Act in the weeks following the attacks, it directed the Federal Aviation Administration (FAA) and the newly established Transportation Security Administration (TSA) to develop ways to strengthen security for cargo shipped on both passenger and cargo aircraft. In mid-May, the TSA finally issued a rule outlining new measures for tightening security.

To the disappointment of several members of Congress, the new rule does not call for the physical inspection of all air cargo. Instead, it focuses on the workers who handle air shipments. For example, the rule requires freight forwarders to conduct background checks on approximately 51,000 off-airport employees who have access to aircargo shipments. It also extends the requirement for full criminal background checks to 50,000 employees of cargo aircraft operators, as a result of extending the secure areas of airports to include ramps and cargo facilities.

The rule also authorizes the TSA to consolidate some 4,000 private industry "Known Shipper" lists into a centralized government database of known shippers, essentially shippers whose security programs meet TSA requirements. The idea is to give TSA greater visibility into the activities of companies shipping goods on passenger aircraft. "By having one list, we will have a better idea of who the shippers are and be able to vet those shippers through the federal government," says Darrin Kayser, a spokesman for the TSA.

In addition, the TSA says it is hiring 300 more aircargo inspectors (which may well indicate that it intends to step up inspections). Those inspectors will be assigned to 102 airports around the nation.

Still some air in the rule
The final rule approved by the TSA is scheduled to begin taking effect next month if the agency has its way, with full implementation slated for Dec. 1.

But Pete Cheviot, director of global security for freight forwarder BAX Global, is not sure the TSA will meet that deadline. "They tell us Dec. 1 everything is going to be in place," he says. "The only thing I can tell you is that it is still in the development stage [as of mid-July]." One industry insider in Washington, who could not speak on the record, said that industry and the TSA were still engaged in implementation details.

Though Cheviot seems unfazed by the new requirements—he says the new measures basically formalize what carriers with strong security programs are already doing—he did say that the rule still had some ambiguity that needed clarification in the weeks before final implementation, particularly in regard to which employees had to undergo further background checks. How that ambiguity is resolved could have a "tremendous impact on the number of people included," he says. And that, in turn, will affect the cost. "Because cost issues are still being discussed, it is hard to put a true dollar value on the total," he says. "But it is not going to be any easier, no matter what."

Estimates of what those background checks will cost vary all over the map. "There are all kinds of cost numbers put out by various airlines," says Satish Jindel, principal of transportation consulting firm SJ Consulting Group in Pittsburgh. Some say it could run to well over $100 per person. Jindel suspects it will be close to the $145 a person estimated for the separate Transportation Worker Identity Credential program that is being implemented by the Department of Homeland Security.

Tough enough?
Though the new rule was issued by the TSA, it grew out of a joint government-industry effort. Before drafting the new measures, the government solicited recommendations for improving security methods, equipment and procedures from an industry study group, the Aviation Security Advisory Committee. "The issuance of the final rule," says Kayser, "is a good example of securing air cargo and doing it in a way, through working with industry, that balances the needs of security with the needs of commerce."

But that still wasn't enough to ensure the rule would meet with universal acceptance. At least one faction apparently sees it as overly restrictive. Responding to a request for comment, the Air Transport Association, which represents most of the nation's airlines, would only issue a formal statement that indicated it had some reservations about the rule. The statement said: "This rule ... reflects many of the 43 cargo security recommendations—developed with our support—that were submitted to the TSA in October 2003. It takes a major step forward by making mandatory many of the security measures ATA members have previously been implementing on a voluntary basis. While we are broadly supportive of the rule, it does, however, reflect some significant misperceptions of unique operational realities for both the all-cargo and combination carriers." It declined a request to expand on the statement.

Others, including several members of Congress, charge that it's not tough enough. Among them are Rep. Christopher Shays, a Connecticut Republican, and Rep. Ed Markey, a Massachusetts Democrat, who had previously introduced measures mandating the physical inspection of all cargo being loaded onto passenger aircraft. They are not likely to let the issue die, especially given last month's terrorist threat in London. In a press release issued after the TSA announced the rule in May, Markey said he would pursue legislation to require inspection of all cargo slated for shipping on passenger aircraft before it is placed on board. He has filed legislation that would phase in that requirement over three years.

Markey can expect resistance to his proposal. "That would choke off commerce and delay air freight," says Dick Macomber, chairman of the National Industrial Transportation League's air transportation committee. Macomber, who was part of the Aviation Security Advisory Committee, defends the current rule as a pragmatic and balanced approach. "There is no silver bullet to prevent a terrorist from trying to put something on an aircraft," he says. "But if you put enough different problems in front of him with a security program and random inspections, he's likely to say it's not worth it."

Impact on shippers
While the rule does not directly address shippers, it could affect them in a number of ways. To begin with, there's cost. Carriers and forwarders facing the added expense of security screenings are likely to pass those costs on to shippers. But not all shippers are perturbed by the prospect. "It's possible as costs go up, rates will go up," Macomber says. "But in the long haul, we will have an added level of security and comfort."

Then there's the possibility of delays. "It is going to mean more cost and possibly slower service in some cases," says Jindel. To minimize the risk of delays, he advises infrequent air shippers to consider using cargo carriers rather than forwarders that make use of passenger airlines and thus, can work only with listed known shippers.

Cheviot, however, expects little direct effect on customers. "From the customer standpoint, there's not much impact except for requiring that we establish identity at the time of a transaction."

The new rule also adds new incentives to ensure that shipping manifests are as accurate as possible to avoid raising questions that could cause freight to be held up. Jindel urges shippers to take a little extra time in preparing air shipments. "Allow time to check out everything and in your paperwork, make sure the contents are exactly what you say they are."

Macomber, who manages logistics for a global high-technology company (he could not use the company's name in the interview without clearance), says that given the increased potential for random inspections, this might be a good time for shippers to review their packaging. He urges his fellow shippers to consider ways to make their packaging easier for inspectors to open and check—for example, by using clear, rather than opaque, internal packaging. "If they can see through the packaging, it is going to make life a lot easier for the TSA and for the shipper," he says.

Jindel looks at it slightly differently, but makes a similar point. "Good packaging is always the first order of business," he says. "If something is not packaged right, it can cause suspicion and result in its being opened, which could cause damage."

Cheviot notes that forwarders share the responsibility for making things go smoothly. "We have to be open with our business partners that we have to scrutinize their freight," he says. Still, he's optimistic that the requirements will lead to greater cooperation between shippers and carriers. "This is where the supply chain mentality comes into play," he says, "not only to uphold what we are told to do, but to do it in ways that keep us both happy."

Throughout the sprawling supply network, everyone must be answerable for his actions, Cheviot adds. "The supply chain starts with the guy [who] fills the box. It does not end until [that box] reaches the final destination and [is taken] off the airplane. Accountability goes all the way through. It has to be there: 9/11 changed the world."

About the Author

Peter BradleyEditor Emeritus
Peter Bradley is an award-winning career journalist with more than three decades of experience in both newspapers and national business magazines. His credentials include seven years as the transportation and supply chain editor at Purchasing Magazine and six years as the chief editor of Logistics Management.More articles by Peter Bradley

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